Politicians love to play Santa Claus, promising people things from the government that it simply cannot deliverespecially jobs that will contribute to meaningful economic growth. Savvy citizens are therefore wise to save their gift receipts: for when it comes to creating sustainable, gainful employment, theres little that federal officials can do other than to stay out of the way of a free-market job-creation engine that runs on private investment, not on government largesse. As J. Geoffrey Colton of the Independent Institute writes at Forbes.com, Contrary to what politicians claim, jobs start not with government but investors.

Private investors are essentialand unique. They provide the fuel that drives job growth and economic progress by taking calculated risks designed to yield more than the value of the resources used up in production. Government spending, in contrast, diverts scarce resources toward activities that fail to earn a positive return: the economic value created by government jobs is typically less than the value of the resources they use up.

Government officials cant make good on many of their economic promises, but they can in principle undo the damage they inflict on employment and economic progress. They can foster productive job growth by cutting government spending and freeing up the resources that can be used by genuine job creators. According to Colton, policymakers can encourage sustainable employment by avoiding punitive taxation and simplifying the tax code; by reducing onerous regulations that discourage investment; by fostering a stable decision-making climate conducive to long-term planning and investment; and by avoiding favoritism thats antithetical to free-market competition. If politicians adopt this approach, Colton writes, American business will likely reemerge sooner rather than later.

Should congressional Republicans follow Ronald Reagan and rely on cost-benefit studies to guide their policies on environmental issues, such as global warming and CO2 emissions? In a recent op-ed in the New York Times, Harvard law professor and former Obama administration official Cass R. Sunstein urges GOP lawmakers to do exactly that. But according to atmospheric physicist S. Fred Singer, theres a hole in that approach, one perhaps as large as a focal point in Reagans environmental policy: the Antarctic Ozone Hole.

As Singer notes, Reagan urged his advisors to use cost-benefit studies to shape his administrations policy on manmade CFCs, chemicals that deplete the stratospheric ozone layer that protects human beings from harmful ultraviolet radiation. But what ultimately drove policy was the lurid reporting on the ozone hole, which was discovered in 1985. Panicky responses to the media coverage are what led the White House to support the international CFC phase-out under the Montreal Protocol in 1987, not cost-benefit analysis. At the time, published evidence did not indicate a detectable human contribution to stratospheric chlorine, writes Singer, a research fellow at the Independent Institute. The importance of the human contribution of stratospheric chlorine, he explains, was not established until years after the Montreal Protocol.

Had Reagan applied his national-security principle of trust, but verify to the issue of the Antarctic Ozone Hole, Singer writes, he might not have been as quick in his support [for the Montreal Protocol] as Sunstein suggests. Singer also blames scientific errors and mistaken inferences for flawed environmental policies adopted by the administrations of George H. W. Bush and Bill Clinton. Singer continues: The moral of the story: Cost-benefit analysis is fine, but the numbers must be supported by sound science.

If sequestration went through, U.S. public debt would still rise to 84 percent of GDP by 2035. And defense spending would fall by $55 billion per year for ten yearsa small reduction for a budget that has grown more than 50 percent since 2000. But President Obama has proposed to House Speaker Boehner a budget deal that would cut defense by only $10 billion per year. Thus, no meaningful reductions in Pentagon spending appear to be imminent. This is a shame, because the U.S. military spending is larded with waste, fraud, and abuse, according to Independent Institute Senior Fellow Ivan Eland.

In his latest op-ed, Eland, director of the Independent Institutes Center on Peace & Liberty, offers several ideas for cutting waste from the Pentagon budget. Here are a few: Reduce the number of aircraft carries from 11 to 6. Cancel purchases of Virginia-class submarines and use some of the savings to support the existing submarine infrastructure. Rely more on the civilian market to supply the military with housing, health care, and commissary systems. And drastically eliminate overseas U.S. military bases and decommission the forces stationed there.

Alas, however, the [military-industrial complex] would probably have success in nixing such much-needed reductions, as they have in beating back automatic defense cuts, Eland writes. To avoid the fiscal cliff, it looks like Obama and Boehner will instead slam straight into the mountain of rising debt.

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